Bill Doskoch: Media, BPS*, Film, Minutiae

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Saving the Toronto Star

Brent Popplewell tells a long yarn in the Walrus about the Toronto Star, its seeming death march as ad revenues dry up — and a long-shot plan to save the storied daily newpaper.

From the Walrus (“Inside the Toronto Star’s Bold Plan to Save Itself“):

It’s increasingly hard to remember the world before the internet, when global and local happenings were announced at set times over the airwaves or dropped on your doorstep each day. “The news” was a simpler business back then, and a profitable one to boot.

But, in the last decade alone, more than 16,000 journalism jobs have disappeared—casualties of a failing business model that has seen the closure of at least 244 local news outlets in 181 communities across the country. Not all the carnage has been in print—more than one-third of jobs lost from 2009 to 2014 were from the broadcast sector, the result of Canadians tuning out cable TV. It’s all part of a large-scale redefinition of what constitutes “mass media,” as companies like Twitter, Facebook, and Google become the platforms most capable of doing what Alexis de Tocqueville, a nineteenth-century French political scientist, saw as crucial to a functioning democracy: to “drop the same thought into a thousand minds at the same moment.”

Those platforms have made the idea of print newspapers feel quaint. And yet without those published products, the majority of journalists left employed in this country would likely be out of work. Torstar’s annual print-ad revenue has dropped by almost 40 percent since 2014, but it’s still over two times greater than the $128.5 million it gets from digital ads, while the $114.3 million the company makes from print subscribers is $114.3 million more than anyone pays to read Dale’s reporting on a screen. Even though Dale reaches a far greater audience online than he does in print, and despite the fact that his paper’s digital enterprise demands a fraction of the cost of its print albatross, if Torstar were to shut down the presses and go entirely digital, approximately 74 percent of its operating revenue would vanish, cratering the entire operation. …

At its core, the institution’s business strategy still resembled its Victorian beginnings: pack the pages with news its editors thought of interest or important, bundle it with ads, and then hawk it to a mass audience on the street. With more readers than any other Canadian newspaper, the Starcould reach the largest share of the Toronto audience—with advertisers paying tens of thousands for a full-page ad. John Honderich, Beland’s son, was the Star’s publisher in 1996, when the newspaper started doing what every other newspaper of the day seemed to be doing: giving away its content online. Industry logic was that the print business model could be feasibly transferred to digital. All a newspaper had to do was attract enough eyeballs, and banner ads would bring in the money. So whenthestar.com went live, the newspaper believed its advertising revenue was safe.

Here’s what the Star couldn’t have anticipated: it would take millions of impressions on a banner ad for it to generate the same revenue as just one full-page ad in print. The numbers never added up. This problem was made worse by the rise of companies like Facebook and Google, which both began collecting far more data from their users than the Star or any other newspaper could have collected from their own subscribers or readers. Suddenly anyone looking to advertise to a mass Toronto audience could just capitalize on all the data Google and Facebook had collected on its users and plant targeted ads inside a Star reader’s Facebook feed or Google search. Though the Star’s readership is actually larger now than it ever was (the paper and website average nearly two million readers a weekday), the paper has lost the capacity to generate the advertising revenue required to fund its journalistic output.

It’s a two-decade-old problem that has been getting worse for all news outlets. …

For years now, the Star has been using a number of data-collection tools—including software from Parse.ly, a New York–based analytics company—to amass its own advanced metrics on who its readers are and what they want to read. Not simply what they click on but what they engage with, what they’re willing to spend five minutes actually reading and then sharing via Facebook and Twitter—and what, fingers crossed, they will be willing to pay for. According to Cooke, the data points to precisely the type of investigative journalism and social-justice reporting that the paper has always invested in. The kinds of stories that take weeks and sometimes months to report—and can cost hundreds of thousands of dollars. “I am warmed that our top-performing stories almost every day are the stories we care about,” says Cooke. “It’s not water-skiing squirrels.”

But even a city the size of Toronto—the fourth-largest in North America—might not actually have enough people living within it willing to pay for those stories. Which is why, contrary to every instinct that would tell it to retreat and fortify its coverage locally, the Star is redoubling its efforts to find stories and readers far beyond the GTA. …

The Starhas tried to adapt to the way information moves in the twenty-first century. But, like its peers, it seems afflicted by a version of what business writer James Surowiecki called the “internal constituency” problem. The industry is filled with people who still recall when their work was profitable and who simply can’t believe those days are gone. Every action the Star has taken to save itself in the current century seems only to have brought it closer to its demise. Despite booming readership throughout the Ford saga, advertising plummeted, and Torstar went from a $131 million operating profit in 2012 to just over $11 million in 2013. That same year, it experimented with a paywall but abandoned it in 2015, believing the old ad model could be replicated via a singular device: the iPad.

Few outside the Star ever thought the investment worthwhile—iPad sales had peaked and had never really taken off among younger readers, who preferred their phones. But the Star pushed forward, believing it could replicate the success that La Presse, the newspaper of record in French Canada, was having with its own app. La Presse had managed to display content so beautifully on the iPad that it attracted not just eyeballs but digital advertisers willing to pay enough to be on it. La Pressewas allowed to phase out its print newspaper. Star managers were inspired to try something similar in one of the most saturated media markets in the world. They bought the rights to use the technology behind the app; hired more than seventy employees, many of them designers; and began to rethink how they packaged news. Visual and interactive content was deemed as important as the traditional investigative reports. John Cruickshank, then publisher, called Star Touch the biggest change in storytelling in a century at the Star.

The venture cost about $40 million. To help pay for it, Torstar sold Harlequin Enterprises to Rupert Murdoch’s News Corp. For nearly four decades, the romance publisher had been a lucrative investment, one of the best-performing divisions of Torstar’s operations. A big chunk of the $455 million sale went toward the company’s debt and funded the iPad app, which, while pretty, never managed to attract anywhere near enough readers or ad dollars to pay for itself.

As Star Touch faltered, the company slashed other assets—newspapers acquired in days of large-scale profit. On January 29, 2016, Torstar shut down the Guelph Mercury, a paper founded the year of Confederation and the place where Dale got his start. Two months later, Cruickshank, the publisher who’d spearheaded the investment in Star Touch, resigned. Then, to help cover the approximately $158 million in pensions and benefits to staff, the newspaper closed its Vaughan Press Centre, selling the property for $54.25 million. For the first time since 1892, the newspaper began outsourcing its printing to a third party.

In June 2017, the Star finally gave up on Star Touch. Thirty Star newsroom employees lost their jobs in a single day. “The news that our tablet product will cease operation in a few weeks is terrible,” wrote Cooke in a memo to staff. “There’s no way to spoon honey on to that.” Honderich and company needed a new plan, fast. …

According to sources, new TorStar CEO John Boynton, standing near the empty desks of the men and women who’d been hired and then fired as a result of Star Touch, looked at what was left of his staff and said: “We can’t be a department store anymore.” The Star needed to transform into a publication less concerned with being everything for everyone on the streets of Toronto. It needed instead to do what tech companies like Facebook and Google were doing—study its readership algorithmically, learn what readers want, and stop feeding them what they don’t.

“We’re going to kill some sacred cows,” he said. The words alarmed many. Someone asked what the Star would consider a sacred cow. “We need the data,” Boynton replied. The response didn’t ease any concerns. In the old model, every reader counted. Soon, only those whom data science indicates have a propensity to pay may end up mattering to the Star—and any other newspaper still standing after the next presidential election. The trend won’t just redefine the value of certain journalists but the value of certain types of journalism as well. …

Boynton insists the Star still adheres to the Atkinson principles, but he speaks with less affinity for the journalism world—of which he has been a part for just over a year—than he does for the data-driven industries in which he spent the last three decades. He says he’s reinventing Torstar from its core, calls the Star a “hero brand”—a type of company drawn to powerful convictions and that markets itself as inspirational, like Nike—and considers Dale one of its many assets whose work appeals to the customer whom Boynton places at the centre of the business. “One of the things on the Star brand that customers are passionate about is politics, and US news, and Daniel happens to be in the epicentre of both.”

To hear Boynton talk, it becomes clear that some readers—which he calls an “old-school journalism term”—will be left behind. “Not everybody’s equal,” he says, as he describes the “hypertargeted execution” the Star is now following. “Name me a company that thinks all people are created equal. Name me a company that chases everybody. Name me a successful company that is all things to all people.”

 

Mon, May 14 2018 » Main Page, Media